As the transition for OTC derivatives to the new trading and clearing paradigm is still under way, significant volumes of energy swaps have been transformed into futures contracts in late 2012. One of the reasons for the transformation of energy swaps into futures contracts was the reluctance of certain customers to register as swap dealers under Dodd-Frank. This point relates to the broader issue of extraterritoriality and its corollary: regulatory arbitrage. The panel will discuss the transformation of certain OTC products into futures contracts, the convergence of global standards and the risk of regulatory arbitrage.

The Current Status, Vision, and Development Strategy of Asian Derivatives Market

As on-exchange volumes were down in 2012, is the outlook for growth better in Asia? What are the current status and development strategy of Asian Exchanges? As the US and the EU have started to adjust their regulatory framework what is the status in Asia? Can national initiatives address the needs of a globalized market?

Moderator: Professor Chang-Hyun Yun, President of Korea Institute of Finance

Designing new products has always been a very challenging task as few ones prove to be successful in the long run; it took time for instance for volatility indices to become popular. OTC markets, sometimes viewed as more innovative, are now shifting to a more transparent environment. Will this shift result in new products or transformation of existing ones like CDS? As Asian markets are growing very fast, will specific products be designed for the region?

This panel will take a look at the most promising products today and how the changes in OTC markets and Asia might favor the arrival of new products.

In 2012, TABB Group estimated that clearing OTC trades implied a margin shortfall of $1.6 – $2.7 trillion. Will there be enough eligible instruments to be used as collateral? What innovative solutions are clearing houses developing to cope with this challenge? What are the business opportunities?

The LME acquisition by HKEx for a £1.38 billion and the ICE bid to acquire NYSE Euronext for $8.2 billion has shown how valuable derivatives exchanges have become. In the first case, the transaction price has set a new record for the industry in terms of valuation. In the second case, the symbol of a 12 years old company taking over a group including the historical NYSE was striking.

The participants will discuss the valuation of these recent deals, the expected synergies, future consolidation, and the advantage of the derivatives exchanges business model.